Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 |
Notes to Financial Statements | ' |
Note 11. Related Party Transactions | ' |
Series A, B and C Convertible Preferred Stock – Change of Control Transaction |
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On April 27, 2012, the Company was party to an agreement whereby Rockland Group, LLC, a Texas limited liability company (“Rockland”), purchased six hundred and twenty thousand (620,000) shares of Biopack Environmental Solutions, Inc. Series A Convertible Preferred Stock (“Series A Preferred Shares”), one million (1,000,000) shares of Biopack Environmental Solutions, Inc. Series B Convertible Preferred Stock (“Series B Preferred Shares”) and seven hundred ten thousand (710,000) shares of Biopack Environmental Solutions, Inc. Series C Convertible Preferred Stock (“Series C Preferred Shares”) from the holders of those shares. The Series A Preferred Shares and Series B Preferred Shares were issued prior to December 31, 2011. The Series C Preferred Shares were issued in April 2012. Together the Shares represented approximately 63% of our outstanding votes on all matters brought before the holders of our common stock for approval and, therefore, represented a change of control. Each share of Series A, B and C Convertible Preferred Stock is convertible into 5 shares of common stock on the date of this transaction. |
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Intangible Asset Acquisition in Exchange for Series D Convertible Preferred Stock |
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On June 25, 2012, the Company entered into a License and Asset Purchase Option Agreement (the “Agreement”) with NorthStar Consumer Products, LLC, a Connecticut limited liability company (“NCP”), under which TriStar Consumer Products, Inc., acquired the exclusive license to develop, market and sell, NCP’s Beaute de Maman product line, which is a line of skincare and other products specifically targeted for pregnant women. In addition, the Company acquired the exclusive license rights to develop, market and sell NCP’s formula being developed for itch suppression, which would be sold as an over-the-counter product, if successful. These licenses are for a period of up to one year, subject to earlier termination upon specified events. During the term of the license, the assets and being licensed will be run by management of NCP pursuant to a consulting agreement. As a result of these license rights the Company are now responsible for developing, marketing and selling the “Beaute de Maman” products, as well as NCP’s anti-itch formula, including all expenses, contractual arrangements, etc., related to product development, manufacturing, marketing, selling, bottling and packaging, and shipping. The Company will also receive all proceeds derived from sales of the products, other than the amounts owed to Dr. Michelle Brown, from whom NCP purchased the “Beaute de Maman” assets. Such proceeds were recorded as a reduction of general and administrative expenses. Under the arrangement with Dr. Brown she is entitled to approximately seven percent (7%) of net revenue for all products sold under the Beaute de Maman brand name and derived from formulas transferred under the agreement with NCP for a 20 year period ending December 31, 2031. In exchange for these license rights the Company agreed to issue NCP 225,000 shares of our Series D Convertible Preferred Stock. This transaction closed on June 26, 2012. Additionally, under the Agreement, in connection with the Company’s license rights and to ensure it can fulfill any immediate orders timely, the Company purchased all existing finished product of the Beaute de Maman product line currently owned by NCP. In exchange for the inventory the Company agreed to issue NCP 25,000 shares of Series D Convertible Preferred Stock. Each share is convertible into twenty five shares of common stock. The fair value of the shares amounted to $89 and was based on the closing common stock price of common stock and the conversion ratio (each share of Series D Convertible Preferred Stock is convertible into 25 shares of common stock) on the date of this transaction. The Company recorded $84 as an intangible asset and $5 as inventory on the date of the transaction. |
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Issuance of Series D Convertible Preferred Stock for Cash and Services |
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On June 29, 2012, the Company entered into a Stock Purchase Agreement with Rockland Group, LLC, an entity owned and controlled by Harry Pond, one the Company’s officers and directors (the “Stock Purchase Agreement”). Under the Stock Purchase Agreement, Rockland Group agreed to purchase 1,540,000 shares of our Series D Convertible Preferred Stock. The value of the shares was based upon the cash received and expenses contributed. |
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The Company issued 1,046,760 shares of Series D Convertible Preferred Stock in exchange for $209 in cash. In addition, the Company issued 493,240 shares of Series D Convertible Preferred Stock in exchange for $355 of expenses contributed by Rockland on behalf of the Company (total Series D Preferred shares issued is 1,540,000). The value of the expenses contributed was based on the closing common stock price of common stock and the conversion ratio (each share of Series D Convertible Preferred Stock is convertible into 25 shares of common stock) the date of this transaction. |
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Issuance of Series D Convertible Preferred Stock for Research and Development |
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On July 11, 2012, the Company, entered into a Purchase and Assignment of Rights Agreement (the “Agreement”) with RWIP, LLC, an Oregon limited liability company (“RWIP”), under which the Company was assigned rights to receive certain royalty payments under previously executed agreements between RWIP and a third party. The royalty payments are equal to Twenty Percent (20%) of all net income (revenue minus expenses) received by the third party InterCore Energy, Inc., a Delaware corporation (fka. I-Web Media, Inc.) (“ICE”) from certain assets owned by ICE, as set forth in that certain asset purchase agreement between RWIP and ICE dated December 10, 2010. In exchange for these rights we agreed to issue RWIP Two Million (2,000,000) shares of our Series D Convertible Preferred Stock. The transaction closed on July 11, 2012. The fair value of the shares amounted to $700 and was based on the common stock price of common stock and the conversion ratio (each share of Series D Convertible Preferred Stock is convertible into 25 shares of common stock) on the date of this transaction. This transaction was recorded as a component of research and development expenses during 2012 because the viability of an alternative future use was uncertain. |
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Consulting Agreements |
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On May 15, 2012, the Company entered into a consulting agreement with Highpeak, LLC (“Highpeak”). The agreement is effective from April 1, 2012 through March 31, 2014. The Company terminated this agreement effective February 2013 and entered into an employment agreement as specified below. The Company agreed to pay Highpeak a monthly consulting fee of $10. The Company incurred $20 for the year ended December 31, 2013 and has an accounts payable balance related to this agreement of $10 as of December 31, 2013. |
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On May 15, 2012, the Company entered into a consulting agreement with Rivercoach Partners LP (“Rivercoach”). The agreement is effective from April 1, 2012 through March 31, 2014. The Company terminated this agreement effective February 2013 and entered into an employment agreement as specified below. The Company agreed to pay Rivercoach a monthly consulting fee of $10. The Company incurred $20 for the year ended December 31, 2013 and has an accounts payable balance related to this agreement of $72 as of December 31, 2013. |
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On June 1, 2012, the Company entered into a consulting agreement with NorthStar Consumer Products, LLC (“NCP”). The two year agreement is effective from April 1, 2012 through March 31, 2014. The Company terminated this agreement effective February 2013 and entered into an employment agreement as specified below. The Company agreed to pay NCP a monthly consulting fee of $15. The Company incurred $30 for the year ended December 31, 2013 and has an accounts payable balance related to this agreement of $262 as of December 31, 2013. |
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On July 17, 2012, the Company entered into a consulting agreement with Chord Advisors, LLC (“Chord”). David Horin, the Company’s Chief Financial Officer has a significant equity partnership stake in Chord. The one year agreement was effective from July 15, 2012 through July 15, 2013. Currently the agreement is on a month to month basis. The Company has agreed to pay Chord a monthly consulting fee of approximately $13 for Mr. Horin’s services and services of his firm. The Company incurred $150 for the year ended December 31, 2013 and has an accounts payable balance related to this agreement of $113 as of December 31, 2013. |
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The Company will recognize cash consulting expenses over the requisite service period pursuant to the provisions of each specific agreement. |
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The Company owed reimbursable expenses, such as travel, office supplies, occupancy, etc., and accrued interest of $262 and as of December 31, 2013. |
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Accounts Payable and Accrued Expensses |
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During the 4th quarter of 2013, NCP forgave certain accrued expenses incurred by the Company and due to NCP. Due to the related party nature of this transaction, The Company recorded a $78 charge to additional paid in capital. As of December 31, 2013 the Company owed Daystar $50, James Barickman $3 and John Linderman 16. |
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Employment Agreements |
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In May 2013, the Company entered into employment agreement with Mr. Barry Starkman to serve as our Senior Vice President of Operations and the President and Chief Executive Officer of HemCon, Under the Company’s employment agreement with Mr. Starkman his employment has an initial term from May 6, 2013 until April 30, 2015 and will automatically renew for two-year terms unless terminated by the parties in accordance with the agreement. Mr. Starkman’s base salary is $250 per year with the possibility of up to 15% to 30% in incentive compensation based on meeting performance criteria to be established by us and HemCon. This employment agreement was terminated during the 1st quarter of 2014. |
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In May 2013, the Company entered into employment agreement with Simon McCarthy to serve as Chief Scientist Officer of HemCon. Under the employment agreement with Mr. McCarthy his employment has an initial term from May 6, 2013 until April 30, 2015 and will automatically renew for two-year terms unless terminated by the parties in accordance with the agreement. Mr. McCarthy’s base salary is $150 per year with the possibility of up to 15% in incentive compensation based on meeting performance criteria to be established by the Company and HemCon. |
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In February 2013, The Company entered into employment agreements with Mr. John Linderman to serve as President and Chief Executive Officer, Mr. James Barickman to serve as Chief Marketing Officer, Mr. Frederick A. Voight to serve as Chief Investment Officer, and Mr. Michael S. Wax to serve as Chief Development Officer. |
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Under the terms of the employment agreement with Mr. Linderman, he will serve as President and Chief Executive Officer until January 31, 2018. Unless notice is given by either party of its or his intent to terminate the agreement not later than thirty (30) days prior to the end of the initial term and the end of any successive term, the agreement shall automatically renew for successive two year periods; provided however, in no event shall the term of his employment extend beyond January 31, 2023. Mr. Linderman’s duties and responsibilities will be those generally associated with a Chief Executive Officer. His compensation will be $300 per year with any additional cash or equity bonuses to be determined by the Board of Directors. |
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Under the terms of the employment agreement with Mr. Barickman, he will serve as our Chief Marketing Officer until January 31, 2018. Unless notice is given by either party of its or his intent to terminate the agreement not later than thirty (30) days prior to the end of the initial term and the end of any successive term, the agreement shall automatically renew for successive two year periods; provided however, in no event shall the term of his employment extend beyond January 31, 2023. Mr. Barickman’s duties and responsibilities will be those generally associated with a Chief Marketing Officer. His compensation will be $300 per year with any additional cash or equity bonuses to be determined by our Board of Directors. |
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Under the terms of the employment agreement with Mr. Voight, he will serve as our Chief Investment Officer until January 31, 2018. Unless notice is given by either party of its or his intent to terminate the agreement not later than thirty (30) days prior to the end of the initial term and the end of any successive term, the agreement shall automatically renew for successive two year periods; provided however, in no event shall the term of his employment extend beyond January 31, 2023. Mr. Voight’s duties and responsibilities will be those generally associated with a Chief Investment Officer. His compensation will be $300 per year with any additional cash or equity bonuses to be determined by our Board of Directors. |
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Under the terms of the employment agreement with Mr. Wax, he will serve as our Chief Development Officer until January 31, 2018. Unless notice is given by either party of its or his intent to terminate the agreement not later than thirty (30) days prior to the end of the initial term and the end of any successive term, the agreement shall automatically renew for successive two year periods; provided however, in no event shall the term of his employment extend beyond January 31, 2023. Mr. Wax’s duties and responsibilities will be those generally associated with a Chief Development Officer. His compensation will be $300 per year with any additional cash or equity bonuses to be determined by our Board of Directors. |
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During the fourth quarter of 2013, the Company converted approximately $1.1 million in Executive Officers compensation into 2,200,000 options with a fair value of $1.9 million, with a strike price of $1.00 per share. The Company recorded a gain on inducement expense of $0.8 million relating to the salary conversion. The fair value of the warrants was determined using the Black-Scholes model with the following assumptions: risk free interest rate – 1.75%, volatility – 85.5%, expected term – 2.5 years, expected dividends– N/A. |
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Related Party Notes |
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During July 2012, The Company issued short term demand notes of $400 to a related party as a result of the sale of the Company’s BPAC Subsidiaries. The stated interest rate is 0.5%. The notes were modified in July 2012 to include a beneficial conversion feature. The conversion price of the modified note is $0.008 per share. The Company recorded a $400 beneficial conversion feature as a component of discontinued operations related to this modification. During the first quarter of 2013, the Company converted notes payable of approximately $32 into 4,029,200 common shares. |
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During the 4th quarter of 2012, the Company issued non-convertible demand notes (formal agreements were not executed) to a related party for $125. The notes do not bear interest and were subsequently amended and converted into 33,334 shares of Series D Convertible Preferred Stock in February 2013. The Company recorded accrued interest and interest expense of $2 related to this note based upon a market interest rate of 8%. |
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During the 1st quarter of 2013, the Company issued convertible demand notes to Frederick A. Voight for $50 which is convertible into 13,333 shares of Series D Convertible Preferred Stock. The notes do not bear interest. In February 2013, the notes were converted into 13,333 shares of Series D Convertible Preferred Stock. |
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During the 1st quarter of 2013, the Company issued convertible demand notes to Harry Pond for $50 which is convertible into 13,333 shares of Series D Convertible Preferred Stock. The notes do not bear interest. In February 2013, the notes were converted into 13,333 shares of Series D Convertible Preferred Stock. |
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During the second quarter of 2013, the Company issued promissory notes to DayStar Funding, LP, a Texas limited partnership and a party controlled by Frederick A. Voight one of our officers and directors, in the principal amount of $2,950. The note has an interest rate of 1.5% per month and is due on or before November 6, 2013. In connection with this promissory note, we issued DayStar Funding, LP, warrants to purchase 1,770,000 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the second quarter of 2013, the Company issued a promissory note with Harry Pond in the principal amount of $36. The note has an interest rate of 1.5% per month, simple interest, and is due on or before November 6, 2013. In connection with this promissory note, the Company issued to the holder warrants to purchase 21,600 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the second quarter of 2013, the Company issued a promissory note with James Linderman, the father of one of our officers and directors, in the principal amount of $100. The note has an interest rate of 1.5% per month, simple interest, and is due on or before August 6, 2013. In connection with this promissory note, we issued Mr. James Linderman warrants to purchase 50,000 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the second quarter of 2013, the Company issued a promissory note with James Barickman, one of our officers and directors, in the principal amount of $50. The note has an interest rate of 1.5% per month, simple interest, and is due on or before November 6, 2013. In connection with this promissory note, we issued Mr. James Barickman warrants to purchase 25,000 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the second quarter of 2013, the Company issued a promissory note with John Linderman, one of our officers and directors, in the principal amount of $50. The note has an interest rate of 1.5% per month, simple interest, and is due on or before November 6, 2013. In connection with this promissory note, we issued Mr. John Linderman warrants to purchase 25,000 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the second quarter of 2013, the Company issued a promissory note with Frederick A. Voight, in the principal amount of $15. The note has an interest rate of 1.5% per month, simple interest, and is due on or before August 6, 2013. In connection with this promissory note, we issued Frederick A. Voight warrants to purchase 7,500 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the third quarter of 2013, the Company issued a promissory note with John Linderman, one of our officers and directors, in the principal amount of $175. The note has an interest rate of 22% per annum, simple interest, and is due on or before October 18, 2013. No warrants were issued in connection with the promissory note. The note was repaid on October 17, 2013. |
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During the third quarter of 2013, the Company issued promissory notes to DayStar Funding, LP, a Texas limited partnership and a party controlled by Frederick A. Voight one of our officers and directors, in the principal amount of $470. The note has an interest rate of 1.5% per month and is due on or before November 6, 2013. In connection with this promissory note, we issued DayStar Funding, LP, warrants to purchase 282,000 shares of our common stock at an exercise price $2.74 per share, which was the fair market value of our common stock on the date of issuance. This note is currently past due. |
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During the fourth quarter of 2013 the Company issued promissory notes to DayStar Funding, LP, a Texas limited partnership and a party controlled by Frederick A. Voight one of our officers and directors, in the principal amount of 300. The note has an interest rate of 18% per annum, simple interest and is due on or before May 1, 2014. No warrants were issued in connection with the promissory note. The Company repaid $70 of this promissory note during 2013. |
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Preferred Stock and Note Conversions |
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In January 2013, the Company received a notice of conversion from Sue E. Alter, notifying the Company that she wished to convert $0.0336 of principal and interest due under that certain Tristar Wellness Solutions, Inc. Convertible Promissory Note dated April 27, 2012 into 4,200 shares of our common stock. The shares were issued to Ms. Alter, without a restrictive legend. |
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In February 2013, the Company received a notice of conversion from Rockland Group, LLC, one of our largest shareholders and an entity controlled by Mr. Harry Pond, one of our former officers and sole former director, notifying the Company that Rockland Group, LLC wished to convert 215,000 shares of Series A Convertible Preferred Stock into 1,075,000 shares of common stock. These shares were issued to Rockland Group, LLC, with a restrictive legend. |
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In February 2013, the Company received a notice of conversion from Rockland Group, LLC, one of the largest shareholders and an entity controlled by Mr. Harry Pond, one of the Company’s former officers and sole former director, notifying us that Rockland Group, LLC wished to convert 710,000 shares of Series C Convertible Preferred Stock into 3,550,000 shares of our common stock. These shares were issued to Rockland Group, LLC, with a restrictive legend. |
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In February 2013, the Company received a notice of conversion from Rivercoach Partners, LP, one of the largest shareholders and an entity controlled by Mr. Frederick A. Voight, notifying the Company that Rivercoach Partners, LP wished to convert 400,000 shares of Series D Preferred Stock into 10,000,000 shares of common stock. These shares were issued to Rivercoach Partner, LP, with a restrictive legend. |
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In February 2013, the Company received a notice of conversion from Highpeak, LLC, one of the largest shareholders and an entity controlled by Mr. Michael S. Wax, notifying the Company that Highpeak, LLC wished to convert 780,000 shares of Series D Preferred Stock into 19,500,000 shares of our common stock. These shares were issued to Highpeak, LLC, with a restrictive legend. |
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In February 2013, the Company received a notice of conversion from NorthStar Consumer Products, LLC, one of the largest shareholders and an entity controlled by Mr. John Linderman and Mr. Jamie Barickman, notifying us that NorthStar Consumer Products, LLC wished to convert 250,000 shares of Series D Preferred Stock into 6,250,000 shares of our common stock. These shares were issued to NorthStar Consumer Products, LLC, with a restrictive legend. |
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During the fourth quarter of 2012, the Company issued convertible demand notes to a related party for $125 which is convertible into 33,333 shares of Series D Convertible Preferred Stock. The notes do not bear interest. In February 2013, the notes were converted into 33,333 shares of Series D Convertible Preferred Stock. |
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During the first quarter of 2013, the Company issued convertible demand notes to a related party for $50 which is convertible into 13,333 shares of Series D Convertible Preferred Stock. The notes do not bear interest. In February 2013, the notes were converted into 13,333 shares of Series D Convertible Preferred Stock. |
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In February 2013, the Company issued 26,667 shares of Series D Convertible Preferred Stock to Rockland Group, LLC in exchange for $100 in cash. |
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In July 2013, the Company received a notice of Irrevocable Stock Power from NorthStar Consumer Products, LLC, one of the largest shareholders and an entity controlled by Mr. John Linderman and Mr. Jamie Barickman, notifying the Company that NorthStar Consumer Products, LLC wished to cancel 2,500,000 shares of Common Stock in exchange for 100,000 shares of our Series D Convertible Preferred Stock. The value of the preferred shares issued was equal to the value of the common shares cancelled therefore no loss was recorded for this transaction. |
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In July 2013, the Company received a notice of Irrevocable Stock from M&K Family Limited Partnership, one of the largest shareholders, notifying the Company that M&K Family Limited Partnership wished to cancel 15,750,000 shares of Common Stock in exchange for 630,000 shares of our Series D Convertible Preferred Stock. The value of the preferred shares issued was equal to the value of the common shares cancelled therefore no loss was recorded for this transaction. |
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In July 2013, the Company received a notice of Irrevocable Stock Power from Rivercoach Partners, LP, one of the largest shareholders and an entity controlled by Mr. Frederick A. Voight, notifying the Company that Rivercoach Partners, LP wished to cancel 6,250,000 shares of Common Stock in exchange for 250,000 shares of our Series D Convertible Preferred Stock. The value of the preferred shares issued was equal to the value of the common shares cancelled therefore no loss was recorded for this transaction. |
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Warrants for Research and Development |
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In February 2013, the Company entered into an Asset Purchase Agreement (the “HLBCDC Asset Purchase Agreement”) with HLBC Distribution Company, Inc. (“HLBCDC”) a Company controlled by Michael Wax, under which the Company exercised an option to purchase the Soft & Smooth Assets held by HLBCDC. The Soft & Smooth Assets include all rights, interests and legal claims to that certain inventions entitled “Delivery Devise with Invertible Diaphragm” as further defined in the Marketing Agreement (the “Soft and Smooth Assets”). Previously, we entered into a Marketing and Development Services Agreement (the “Marketing Agreement”) with InterCore Energy, Inc., a Delaware corporation (“ICOR”), under which the Company was retained to market and develop the Soft and Smooth Assets and were granted the exclusive option, in the Company’s sole discretion, to purchase the Soft & Smooth Assets from ICOR. Subsequently, ICOR sold the Soft and Smooth Assets to HLBCDC, transferring the rights to purchase the Soft and Smooth Assets from ICOR to HLBCDC. In exchange for the Soft and Smooth Assets the Company agreed to issue to HLBCDC warrants enabling HLBCDC to purchase One Hundred Fifty Thousand (150,000) shares of common stock at One Dollar ($1) per share, with a four (4) year expiration period. The warrants were valued at the closing price of the Company’s common stock on the date granted and amounted to approximately $100. The fair value of the 150,000 warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions: risk free interest rate - 0.88%, volatility - 85%, expected term - 4 years, expected dividend n/a. |
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Acquisition of Beute de Maman product Line from NorthStar Consumer Products, LLC |
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In February, 2013, the Company closed an Asset Purchase Agreement (the “Asset Purchase Agreement”) with NorthStar Consumer Products, LLC, a Connecticut limited liability company (“NCP”), and John Linderman and James Barickman, individuals (the “Shareholders”), under which the Company exercised an option to purchase a brand of skincare and other products specifically targeted for pregnant women (the Beaute de Maman product line), in addition to an over-the-counter itch suppression formula (together, the “Business”). Previously, the Company entered into to that certain License and Asset Purchase Option Agreement dated June 25, 2012 with NCP (the “License Agreement”), under with the Company licensed the Business from NCP and had the option to purchase the Business from NCP upon certain conditions being satisfied. As set forth in the Asset Purchase Agreement those conditions were either satisfied or renegotiated to the satisfaction of the parties and the Company exercised an option, and purchased, the Business from NCP. As consideration for the purchase of the Business the Company agreed to issue NCP, or its assignees, Seven Hundred Fifty Thousand (750,000) shares of Series D Convertible Preferred Stock. The fair value of the consideration given was $2,813 and assets received was $15 liabilities assumed $7 and such fair value was immediately impaired, due to the uncertainty of future cash flows during 2013. There was no acquired assets other than intangible assets and therefore no purchase price is being presented. The fair values for acquired intangible assets of NCP were determined by the Company using a valuation performed by an independent valuation specialist. In addition, the Company also recorded an additional $2,805 expense based on the stock valuation on the date of this transaction. This transaction was recorded as a component of research and development expenses during 2013 because the viability of an alternative future use was uncertain. |
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Common Stock Issued for Cash |
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During the fourth quarter of 2013, the Company issued for cash, 194,445 shares of common stock for approximately $175 in cash. The shares were issued to John Linderman. |
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Warrants for Services |
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During the first quarter of 2013, the Company issued 25,000 warrants to Chord Advisors, LLC with an exercise price of $0.45 and a five year term. Each warrant is exercisable into one share of common stock. The warrants were valued at the closing price of the Company’s common stock on the date granted and amounted to $20. The fair value of the 25,000 warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions: risk free interest rate - 0.85%, volatility - 85%, expected term - 4 years, expected dividend n/a. |
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Forgiveness of Accounts Payable |
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During the 4th quarter of 2013, NCP forgave certain accrued expenses incurred by the Company and due to NCP. Due to the related party nature of this transaction, The Company recorded a $78 charge to additional paid in capital. |
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Payments to Prior Management |
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As of December 31, 2012, $325,970 was due to Sean Webster, our former Chief Financial Officer, Secretary, Treasurer, and a former director, and $564,320 was due to Gerald Lau, our former Chief Executive Officer, a former director of our company. This amount represents money advanced to us which had not been repaid back to them as of December 31, 2012. The amount was unsecured and bears no interest. On September 14, 2012, Rockland Group, LLC, an entity controlled by Harry Pond, one of our former officers and directors and one of our current shareholders, entered into an Assistance and Settlement Agreement with Mr. Webster and Mr. Lau under which they agreed to settle the amounts we owed to the for $32,000, which amount was due to Mr. Webster and Mr. Lau when the company got current in its periodic reporting obligations under the Securities Exchange Act of 1934, as amended. The $32,000 was paid to Mr. Webster and Mr. Lau on or about January 25, 2013, and, as a result, no further amounts are owed to Mr. Lau or Mr. Webster and they agreed to release the company from any additional amounts owed. |